Annual crosstie report 2013

Crossties can be made from a variety of materials and all parts of the industry report strong growth in 2013.

Wood supply is low due to high rains this year and timber crosstie suppliers and the Railway Tie Association are concerned about the availability of materials to keep up with the current demand. Dispite economic uncertaintly in the U.S., manufacturers of all varieties of crossties are reporting a steady 2013 and optimistic 2014.

RTA"The year has been relatively quiet on the demand side of the tie industry," noted Jim Gauntt, executive director of the RTA. "Our growth forecast from earlier in the year was trimmed to 22.9 million ties for 2013 in the latest update. With coal shipments lower and an economy that is just treading water with only marginal growth, that is still an incredibly strong showing by railroad purchasers."

Gauntt says the biggest unforeseen challenge to the market right now has been log supply. Incredibly wet weather throughout most of the year, along with a logging community that has been constrained in capacity by attrition during the previous recession, has led to tie supply issues.

"Logs are not the only concern for tie suppliers," he said. "The impacts of a better housing market and the demand for low-grade wood for crane mats and board road for the domestic oil industry has further tightened supply. Overall, the supply of ties has been cut by 20 percent year-to-date through August from 2012.

Fortunately or unfortunately, he says, depending on your perspective, the oil shale infrastructure build out for materials supply and oil shipments have actually bolstered demand for ties. This has mitigated the loss of demand due to the reduction in coal shipments. Shortline industry and other users have also remained relatively stable, he says.

"For demand to be only 200,000-300,000 ties less than 2012, there are still a lot of good things going for railroads," Gauntt explained. "Whatever generates freight shipment by rail translates into stout maintenance programs."

If the economy grows as expected in recent Standard and Poor's forecasts for 2014, Gauntt says the industry should see a potential tie demand rebound to 23.5 million ties. Unfortunately, the supply imbalances won't go away anytime soon, he notes.

"The question will be, can demand be met? We have already seen the impacts of insufficient supply be realized in the marketplace with higher prices for ties and that may impact 2014 budgets for large and small roads alike. Even if fundamental demand is more than 23 million, actual realized purchases could fall short of that. The expectation, as of now, is that imbalances could remain in the supply side into 2015," Gauntt said.

RTA researchRTA continues to conduct a long-term research program, in conjunction with the Class 1 railroads, on alternative wood preservative systems. Alternative Wood Preservative Program (RTA-AWPP) is being conducted by Mississippi State University in two separate sites using full-size tie replicates. The two sites differ in that one site is infested with native subterranean termites indigenous to the U.S. and the second site is infested with Formosan subterranean termites. Several preservative oil-borne, water-borne and dual-treatment systems are being evaluated in a side-by-side comparative test.

"Phase 1 of the 20-year study has been underway for five years and Phase 2 was installed in 2012," Gauntt noted. "The second phase includes testing on a variety of ACZA products and the Koppers' and Stella-Jones' dual-treatment systems that differ from the two-step process that was originally introduced in 2004. All of these systems, and all of those included in Phase 1, are being evaluated against untreated and creosote-only controls. The idea is to measure any differential performance observed in seven by nine ties.New RTA research and developments in the tie industry will be covered at RTA's 95th Annual Conference in Lake Tahoe, Nev., October 9-11.

WoodWith improvement in the economy, you have more spending on maintenance, Boatright Companies notes, which it says has contributed to increased crosstie sales to Class 1s and shortlines. The company primarily sells dual-treated (borate and creosote) crossties.

"The dual-treated crosstie is a great improvement over the traditional creosote treated tie," said Ashley Baker, chief legal counsel. "We have sold a lot of copper naphthenate crossties to our customers and we understand they were strategically placed in areas for review and monitoring."

The increased rainfall this summer has tightened the green tie inventory, Boatright says. Loggers could simply not get the product out of the woods. Alabama, where its manufacturing plant is located, had a 50 percent increase in rainfall.

"Crosstie replacement is a cost of doing business for the railroads," said Baker. "Business is fairly constant as the railroads plan well in advance of their replacement needs."The company says it is constantly trying to be more efficient. Boatright has invested in new plating and borate applications in its tie mill operations.

For Koppers, Inc., demand for treated railroad products has remained strong thus far in 2013. Class 1 demand has remained relatively consistent across the board, with the shortline/contractor/transit markets showing some variability by region. Overall, it appears that 2013 is shaping up to be another solid year, John Giallonardo, senior sales manager, says.

"There have been some significant raw material challenges this year for the industry, due primarily to the disparity between grade lumber pricing and crosstie pricing, stated Giallonardo. "This has been sparked by the continued recovery of the U.S. housing industry and the related flooring market, as well as the increase in demand for crane mats and board road material required for the shale gas industry. RTA data confirms that crosstie purchases are down significantly from this time last year. However, recent financial support from the Class 1 railroads should help stem the tide and bring more stability back to the marketplace."

Koppers says it continues to see a positive outlook for tie demand both short-term and long-term. The Class 1s continue to be consistent with their maintenance and tie buying programs. The possible extension of the 45G tax credits for 2014 would be a tremendous boost for the shortline industry and would allow those companies to maximize investments in their infrastructure, Giallonardo explains.

"We continue to see the ongoing growth in demand for borate-treated ties," he said. "The highest decay zones are still the primary target area for installation. However, favorable life-cycle economics have created more expansion for these products."

The current state of the raw material market is without question the primary issue that is most impacting our industry, Giallonardo says.

"Pricing competition from several different end-use markets has made it a challenge to procure enough ties to meet the needs of the entire industry," he noted. "Hopefully, recently instituted price corrections will help reverse this trend.

According to Stella-Jones, Inc., its business has been slightly better than last year, due to the industry's strong demand for treated wood crossties.

"Class 1s continue to spend capital on infrastructure improvements, as well as funding projects related to the Shale gas and Balken oil boom," explained George Caric, vice president of marketing. "The growth in shipments of frac sand, pipe and oil by rail has created demand for new track construction from our commercial segment, as well. Last year, we reported that we started construction of a new treating plant in Cordele, Ga., and we are excited to say we have started treating and will be up to full production by November 1."

During the past year, Caric notes that the use of dual-treated ties is now being accepted by all of the Class 1s. The company has also noticed a pick-up in demand for bridge timbers and has made significant capital improvements to its bridge lines to meet this demand that it estimates will be strong in the coming years.

While Stella-Jones is confident it will source all its customers' requirements, a major challenge currently impacting the crosstie market is a potential shortage of green tie production, due to extremely wet weather in the areas producing crossties, as well as a resurgent demand for hardwood lumber along with the continued demand for board road and mat timber due to the aforementioned oil and gas industry boom.

ConcreteKSA's pre-stressed concrete crossties are manufactured at its facility located in Sciotoville, Ohio, and are designed for heavy-haul mainlines, mass transit and industrial applications.According to the company, KSA's ties meet or exceed all current AREMA specifications and have a 22-year proven track record of reliability along with being both PCI and AAR M-1003 quality certified.

"Though sales are down compared to 2012, 2013 will be considered a very good year," explained Scott Craig, general manager. "The bulk of the business this year has mainly come from heavy-haul and industrial applications. Two of the industrial projects have involved a newly-designed gantry tie used in association with a new crane for coal handling facilities located in Southern Louisiana."

Craig notes that the outlook for 2014 is looking like a solid year. At this point, it looks to be more diverse than 2013 with a very even mix of heavy-haul, transit and industrial projects.According to Jim McCaslin, general manager concrete products at L.B. Foster Company, the past year has presented a number of opportunities for the company to expand its concrete tie business.

"Recently, we reorganized our North American sales team to create a more customer-centric sales organization," said McCaslin. "Each customer, whether they are a Class 1 railroad, transit agency, shortline/regional railroad or contractor, will have one primary outside point of contact and one primary inside point of contact. We want to improve the ease of doing business, enhance our external and internal communications and provide new and innovative products and services for our customers."

While its facility in Tucson, Ariz., is dedicated to supplying the needs of Union Pacific, the company's plant in Spokane, Wash., has been able to take advantage of sales and technical opportunities across key concrete tie end-use applications much more rapidly.

"That has meant that we continue to leverage our manufacturing capacity there for new transit project work," McCaslin stated. "During the past year, the company has enjoyed steady demand for concrete ties among our Class 1 and industrial customers, but demand from transit agencies is trending up. We have experienced a nice increase in demand from North American transits throughout the past year. And despite issues with federal, state and local funding for these types of projects, we remain very optimistic that demand from that segment will remain solid."

The past year in the Midwest has proven to be successful for L.B. Foster. The company has supplied concrete ties to North and South Dakota and other Midwest states' rapidly growing oil and natural gas development projects. The company's 399 series gantry tie is seeing increased growth in port applications, McCaslin explains.

"For example, working with Railworks, L.B. Foster is providing ties for the Por of Los Angeles TraPac Terminal in Los Angeles, Calif. And in transit applications, the company has been awarded contracts to supply ties to Bay Area Rapid Transit (BART) as part of the BART extension to Antioch, Calif., as well as ties to Los Angeles County Metropolitan Transportation Authority for the Expo II project.

On the Research & Development side, L.B. Foster has developed different types of resilient, dual block concrete ties. Through the collaboration of the company's transit products and concrete tie technical teams, the Low Vibration Track Tie in two different length designs were supplied to BART for the Warm Springs extension.

"The longer length design can accommodate an extension bracket for mounting a power rail insulator post," McCaslin noted. "This also continues to build upon the successful relationship that L.B. Foster has with Kiewit Parsons on West Coast transit projects. The company also continues to work with government and university research teams. The goal is to successfully translate new product and research ideas into novel solutions for the company's key end use customers."

Business is very strong right now for Rocla Concrete Tie Inc. (RCTI), the company notes and says the concrete tie industry continues to have a backlog of work due to a good mix between heavy-haul customers and transit-oriented work.

He says he sees projects in the West Coast ports as strong areas of investment. Port of Los Angeles, Port of Long Beach, Port of Oakland and Manzanillo, Mexico, continue to invest to take advantage of the growing economies in the Asian markets, he explains.

"We expect the ports' intermodal market to continue to rise along with growth for the Class 1 railroads intermodal traffic," Urquhart said.

Additionally, RCTI is supplying projects for BART, Sacramento Regional Transit and the Regional Transportation District in Denver.

Rocla, along with fastener suppliers and its key customers have developed a new "Yard Tie" for less demanding heavy- haul applications and industrial track.

"The combination of a more cost effective tie and fastening system offers concrete ties at a more competitive price than wood," noted Urquhart. "The price advantage, along with the fact that up to 25 percent fewer ties are needed per mile, ensure that concrete continues to be the lowest installed cost for all tie types, while offering the substantial life-cycle benefits of concrete ties."

Rocla has finished commissioning its new facility in Pueblo, Colo., in early 2013, and is scheduled to complete an expansion project to add even more capacity to this facility. This will bring its overall capacity in Pueblo to almost one million ties per year.

"This investment is necessary to keep us with the ongoing demand of the Class 1 railroads and a strong mix of industrial and transit projects," he explained.

Composite/alternativeAxion International Inc. says its business continues to grow this year. It's recycled composite material has been used in tunnels, crossings and switch sets.

"We are actually seeing both the transits and freight lines give greater recognition to the overall cost of maintenance and repairs and the role that composites can play in reducing those and replacement costs," said James Kerstein, founder and chief technology officer. "The longevity offered by Ecotrax® ties encourages the industry to review overall life-cycle costs. The railroads also seem to be stressing environmental impact considerations, with composites yielding positive results with regard to sustainability and greatly reduced disposal costs."

Axion says that it and its rail industry partners are dedicated to seeing the standards for composite ties raised to more accurately reflect the needs of the industry and to eliminate borderline manufacturers who have not utilized the proper AREMA and ASTM test standards or had those tests performed at independent outside laboratories.

"Axion is dedicated to answering the ever growing needs of the rail industry by addressing long-term means of reducing price, locking in consistent and reliable supplies of material and improved manufacturing processes and continuing to support strict quality control efforts," Kertsein explained.

IntegriCo Composites says business has doubled over the previous year and is slated for similar increases in 2014 and beyond. Additionally, the company named a new CEO, Scott Mack, who will lead the company in the future. IntegriCo says its growth in 2013 can be attributed to corporate sustainability initiatives, in-track performance of its composite products and expanded marketing coverage.

IntegriCo's 10-year warranty and life-cycle of 40-50 years is designed for problem situations, such as heavy-haul lines, curves, turnouts and grade crossings, the company says."IntegriTIES out-perform all other tie materials in high-decay areas and caustic environments and are ideal for areas with limited access such as bridges, tunnels and transit systems," explained Matt McCooe, vice president sales and marketing. "We have a growing customer base of Class 1s, shortlines, industries, ports, transits and government facilities. Our customers like the idea of a long-term cost solution without related disposal costs. IntegriTIES can be recycled into new ties at the end of their useful life cycle with IntegriCo's state-of-the-art processing equipment."

McCooe believes AREMA Committee 30 – Ties, will be considering a change in the future to raise the minimum performance standards for composite ties to reflect higher minimums based on documented in-track composite tie performance.

"As part of our commitment to quality, IntegriCo is also pursuing additional test methods to better predict future failure modes of composite ties and will keep the industry updated regarding our progress in that regard," he said.

One of the major challenges facing all recycled plastic crosstie manufacturers has been a history of starts and stops due to initial quality issues, McCooe explains and says that since 2009, IntegriCo has answered the challenge via changes to its processes and formulation.

"Since the changeover in 2009, more than 150,000 IntegriTIES have been installed in track, some of which have accumulated more than 50 mgt annually in wet, high-rot locations. Railroaders realize our ties can be installed easily with existing equipment and, most importantly, will last up to 50 years in track."

Preservation and life extensionEncore Rail Systems, Inc., supplies the products, as well as the application equipment, for extending the life of wood and concrete crossties. One of the company's newest products is its SpeedSet® UV epoxy system for the prevention of concrete tie seat abrasion. Encore is currently providing the epoxy and application equipment to four tie plants in the U.S. and Mexico. The epoxy is applied on the seat of the concrete ties after they are unmolded. Encores' epoxy products were first applied in the field more than 12 years ago and the company says the railroads are reporting no sign of epoxy degradation or seat abrasion.

Encore recently installed its SpeedSet UV epoxy system at the Itisa Concrete Tie Plant in Puebla, Mexico. Both the Ferrocarrill and Ferrosur railroads are having their ties coated at the plant. Encore is now applying SpeedSet to more than one million ties a year, the company says and notes that it has the ability to repair concrete ties out of track.

Encore also developed a remedial wood tie repair product that can be applied after the ties are adzed in the rail gang consist. This product has a borate solution that penetrates the wood and protects the area from tie rot.

"It provides longer life to wood ties, especially in the southern states, where ties would normally be changed out more frequently," noted Doug Delmonico, president."Encore now has multiuse equipment so that one of our ride on tie pluggers, for example, can do concrete ties and wood ties without having to change tanks or dispensing equipment; a versatility found nowhere else in the industry. Another new development in the works is an application system utilizing remote controls with no need for an operator," he said.

Encore has seen an increased use of tie plugging equipment expand throughout the industry. Now contractors, shortlines and regional railroads are all using chemical tie plugging equipment for even the smallest of jobs. Encore has increased its fleet of equipment to more than 110 units and there is still a demand for more, the company says. Another trend Encore is seeing is the process of coating concrete ties at the plant with more and more railroads requesting that ties be coated with SpeedSet as a part of the manufacturing process.

"Customers are asking us to provide more information about their tie plugging equipment and process," Delmonico explained. "In response, we have installed GPS units on all of our machines. These units offer the railroads a reporting system. They can see where the machines are located, when they are traveling or working, the number of feet plugged and even how many times the trigger on the dispensing valve was pulled on a daily basis. We also have tied the material in the tanks to the GPS system so that the supervisors on the gangs can see how much material is in the tanks and how much was used during the day with accuracy of about plus or minus one percent."

Lonza Wood Protection/Arch Wood Protection, Inc., licenses the production of Chemonite® ACZA-treated crossties. Since October 2012, two additional treaters of Chemonite ACZA-treated wood products have begun production, one in Oregon and the other in Ontario, Canada. While demand has remained about the same, the company says, adding these new treating facilities makes ACZA products more readily available.

"ACZA-treated crossties are economical," noted Tim Carey, business manager Chemonite Products. "Additionally, ACZA can be treated with borates in an efficient single step."While the company has been offering ACZA-borate ties for several years, Lonza now offers a 25-year limited warranty against termites and decay for Douglas-fir and hardwoods treated with ACZA-borate.

"ACZA has been providing reliable service for decades in demanding applications," noted Carey. "The USDA Forest Products Laboratory tested ACZA-treated stakes in Saucier, Miss., in ground contact at a 0.25 pcf retention (0.40 pcf is the standard treatment for crossties) and after 30 years, there are still no failures. In this test, neither creosote nor copper naphthenate showed better performance than Chemonite ACZA."

He notes that Chemonite is an excellent Type 3 termiticide, killing the colony rather than just individual termites through direct contact and says that it's proven against Formosan termites and carpenter ants and has fire-resistance properties.

"We have installations in south Florida and Canada to evaluate climate exposure," said Carey. "After two years, 100 percent of the ties installed in the extreme south Florida climate are performing well; none have failed."

"Plus," added Carey, "a recent life-cycle analysis conducted by an independent consulting firm, confirmed that ACZA-treated crossties have lower environmental impact than concrete or plastic/composites crossties for each of the six categories assessed."

"The growth of our QNAP® copper naphthenate and Cellutreat® disodium octaborate tetrahydrate (DOT) borate wood preservative have exceeded our expectations," explained Kevin L. Kirkland, president and CEO of Nisus Corporation. "The Class 1 railroads have been very positive with regard to both products and we are now seeing purchases from shortlines and transit. We believe that dual treatments using borates will become a standard specification for all railroads with tracks in American Wood Protection Association's high and severe decay hazard zones 4 and 5."

The railroads seem to be very excited about both the green environmental profile and the safer handling characteristics of the borate and QNAP ties, notes Kirkland. He says, the products are Environmental Protection Agency registered, use non-restricted pesticides with no listed carcinogens, have a low toxicity and produce minimal odor. Kirkland notes that QNAP-treated ties will not burn the skin of workers who handle them and there is minimal bleeding or drippage when used on bridge timbers.

"We are seeing a trend to try to extend the life of existing and new bridge timbers by adding borates," said Kirkland. "Wood ties have the lowest carbon footprint of any form of ties available and remain the most sustainable. They actually sequester carbon and can be used for fuel at the end of their life. The primary challenges with wooden railroad ties are incipient decay, spike kill and heartwood treatment. A tie that is dual-treated by dip diffusion in DOT borate prior to air seasoning, then pressure treated with copper naphthenatesolves all these problems."

"Our customers want to understand the differences in physical properties of the different tie life-extension products," explained Mike Raab, owner and vice president of operations of R-Solutions. "As crosstie repair becomes more standardized within the maintenance-of-way programs of our customers, there is an effort on their part to understand the differences in pricing and physical properties of the particular tie life-extending materials being presented to the industry."

R-Solutions receives most of its business for tie life-extension products from Class 1s and contractors for shortlines.

A recent project that R-Solutions worked on in conjunction with Racine Railroads Products was the development of a new piece of application machinery. The delivery system developed for its customers was in direct response to industry needs.

"As tie life-extension products become more prevalent, the need for safer and more efficient equipment was needed," Raab said. "So, in response to industry need, a new type of ride on tie plugging application technology was developed. The equipment has a state-of-the-art metering system for an accurate mix ratio 100 percent of the time. Also, the unit has an enclosed cab capable of dispensing material from the comfort of an enclosure with a joy stick."

Willamette Valley Company (WVCO) is a manufacturer of polyurethane polymers and compounds that has serviced the railroad industry since 1999. WVCO has two flagship technologies for the remediation of wood and concrete crossties. SpikeFast®, a non-foam urethane compound is used for spike hole filling or tie plugging and CTR-100, which is used on concrete ties to restore the rail seat and hasten the onslaught of rail seat abrasion. WVCO says Both technologies and the application equipment are consistently under continuous improvement. Now, WVCO is bringing a new technology into the railroad industry, FastPatch, which is a polyurethane repair technology for concrete spalling.

FastPatch can be used to make a non-structural repair on concrete ties where damage has caused exposed rebar. These patch repairs can be done in-situ, cures in 15 minutes and prevents further corrosion, Murray explains.

Most of WVCO's business is derived from the Class 1s and shortlines, however the company is now selling FastPatch high performance rail grouts for imbedded rail installations to light rail and transits.

"WVCO is working with the industry to provide polymer solutions that can remediate existing infrastructure improvements in a fast, durable and safe manner, compared to the inferior repair products currently be utilized," Murray said. "FastPatch repair products are fast curing, absorb and deflect energy with thier high integral flex physical properties. When these characteristics occur, the repairs have a longer life cycle than the traditional repair products."